Saturday

Jul 13, 2019 at 12:01 AMJul 15, 2019 at 6:00 AM

CLINTON – The firefighters’ union in Clinton says it canceled a telephone fundraising drive led by former New England Patriot Fred Smerlas’ company after receiving numerous complaints, including one from a firefighter who said a caller improperly invoked the Ava Roy Fund.

In an interview, Mr. Smerlas and his vice president denied that the union ever lodged any complaints, a statement Union President PJ Chamberlain labeled false.

“Stop using any fallen firefighter and their families (to solicit donations),” Mr. Chamberlain said he told All-Pro Productions, the Hudson solicitation agency Mr. Smerlas has owned since 1995.

The union, Clinton Firefighters Local 3189, never authorized the use of Ava Roy's name in scripts, Mr. Chamberlain said, and was not collecting money for that purpose.

The Ava Roy Fund was established to collect donations for the daughter of Christopher Roy, the Worcester firefighter killed last December battling a blaze prosecutors say was set intentionally.

The Clinton union took to Facebook Feb. 21 to ask people to stop donating to its own solicitor.

“We are making every effort to rectify their behavior,” it wrote, adding that its solicitor “has not been acting in a manner consistent with (our) beliefs.”

Asked about the drive’s cancellation, Mr. Chamberlain told the Telegram & Gazette he received more than 20 complaints. Most were from residents who reported feeling strong-armed over the phone, he said, while a firefighter reported the alleged improper reference to the Ava Roy Fund.

“’What did you just say about the Ava Roy Fund?’ ” Firefighter Dustin Whiteaker recalled telling the caller, at which point, he said, the person reiterated that the fundraising “helps funds like the Ava Roy Fund.”

Mr. Chamberlain said he brought his complaints to All-Pro Vice President of Operations Maurice Rondeau and was not satisfied with the response Mr. Rondeau provided.

In a June 19 recorded interview with Mr. Smerlas and a company lawyer, Mr. Rondeau denied receiving any complaints from the union.

In a June 4 phone interview he would not allow a reporter to record, Mr. Rondeau stated the allegations were "not true." He did not indicate that he’d never heard them before.

“That was a simple thing with PJ [Chamberlain] butting heads with someone,” Mr. Rondeau said, adding that Mr. Chamberlain had not been happy with the drive from the outset.

The matter is not the only one involving All-Pro that has drawn scrutiny.

Attorney General Maura T. Healey’s office confirmed in an email that it is reviewing complaints filed against All-Pro and its largest charitable client in 2017 – a veterans charity for which Mr. Rondeau serves as vice president.

“Pure coincidence,” All-Pro lawyer Eric S. Brainksy replied when asked about the timing of the formation of the charity, New Englanders Helping Our Veterans, which took place the same year in which All-Pro lost its longtime most lucrative charitable client, New England Paralyzed Veterans of America.

NEHOV donated $19,962 to veterans in 2017, according to IRS filings, and paid more than seven times that amount — $149,558 — to All-Pro in fundraising fees.

Mr. Rondeau and his sister comprise two of the charity’s three directors. Neither the charity nor All-Pro disclosed to the AG the details of their 2017 fundraising contract.

Failing to properly disclose such a contract is a violation of law, the AG’s office confirmed.

Documents not filed

Under Massachusetts law, every fundraising contract between a professional solicitor and charity must be filed with the AG's office before any calls can be placed. Also, after the money is collected, solicitors are required to file a report with the AG listing how the proceeds were split up.

No reports were filed with the AG for the 2017 calling campaign between All-Pro and NEHOV, the AG’s office confirmed.

Also, NEHOV did not disclose the details of the campaign on a separate report charities file with the AG each year. Nor did the nonprofit file with the AG a copy of its 2017 990 tax-exempt IRS filing — a document on which the campaign was disclosed.

Barbara Anthony, the state’s former undersecretary of consumer affairs and business regulation, said failing to notify the AG of a charitable campaign could be seen as a deceptive business practice.

“If there is deception there, I think that’s a serious problem,” she said, because the law is set up to ensure donors know how much of their money went to charity.

In their June 19 interview, Mr. Smerlas and Mr. Rondeau categorized the missed filings from All-Pro as mistakes that occurred around the time they were moving offices and trying to catch up with paperwork after the departure of their longtime CEO. They said they would correct the record.

AG records indicate that All-Pro filed the required documentation for six other calling campaigns in 2017. It received $132,047 in fees from those clients, meaning that the nearly $150,000 it failed to disclose receiving from the NEHOV campaign represented more than half of its revenue from charitable clients that year.

Pressed on that point, Mr. Brainsky, the company lawyer, said All-Pro only makes approximately 20% of its gross fundraising money from charitable campaigns.

The remainder, he said, comes from noncharitable campaigns that do not have to be registered by law, such as a union that only uses the money for the benefit of its members.

Mr. Brainsky said the AG has not reached out to his client or to NEHOV to ask any questions, adding that, in his experience, such agencies see paperwork errors frequently.

The AG’s office confirmed it has received two complaints “against both NEHOV and All-Pro,” but declined to release them.

The agency cited the investigatory exemption to public records law, writing the materials “relate to matters under review by the AGO.”

“You can never lose money”

AG data shows that All-Pro has received $9.5 million of the $13.68 million it has raised for charity since 2010. It received $4.3 million of the $5.6 million it raised through 2016 for its largest charitable client, New England Paralyzed Veterans of America.

Such figures are not unusual in the world of professional solicitors, who can retain as much as clients will allow them under a Supreme Court ruling that protects solicitation as free speech.

Solicitors note they pay the overhead for the calling campaigns, saying the amount of profit they make is much less than what they are paid.

“One year we lost 30% and almost went out of business,” Mr. Smerlas said, adding with a chuckle that his company “doesn’t profit much now.”

In a letter sent after their interview, Mr. Brainsky said that the percentage of donations All-Pro provided to NEHOV, 24%, was greater than the 16% average all other veterans charities with campaigns in Massachusetts received in 2017.

Mr. Brainsky said 11.22 cents of each dollar of NEHOV's gross revenue in 2017 went to veterans.

NEHOV raised 99% of its 2017 revenue through All-Pro, according to its 990 filing.

Mr. Smerlas said media accounts frequently fail to properly recognize that charitable clients use companies like his for a reason — they receive money with no risk.

“You can never lose money,” Mr. Smerlas said, because the caller pays the overhead.

Debra Freed, executive director of New England Paralyzed Veterans of America, said All-Pro was a huge help to her budget for years.

She said she only stopped using All-Pro after her national parent corporation mandated its chapters stop using professional solicitors.

Times have been tough since she stopped using All-Pro, she said, as she’s had to move offices and has seen her budget strained.

She described the company’s service as “world class,” adding that any complaints she had were always addressed promptly.

He said he did not appreciate the attitude of the leader of the 2017 drive, a man named James DeFeo, who he later learned has a criminal record.

Records in Salem District Court in New Hampshire show Mr. DeFeo was arrested in Salem in September 2017 for allegedly stealing cologne from Macy’s.

Mr. Defeo, who did not return a phone call, wrote in court records that he had a previous conviction for DUI.

Mr. Rondeau on June 4 said he did not know about Mr. DeFeo’s record. He said Mr. DeFeo – and all those who call on All-Pro’s behalf – are independent contractors, not All-Pro employees.

In their June 19 interview, All-Pro officials said they had never been cited for wrongdoing by the AG. They said there are other calling companies out there whose business practices would be more appropriate to scrutinize.

Mr. Rondeau said it is possible that fraudulent calls could come from scammers not associated with his company at all. Scammers – or even rival telemarketers – have been known to target communities in which they know a legitimate drive is occurring, he said.

Mr. Chamberlain said he does not plan to use All-Pro or any other professional caller again. While it is nice to raise money as a group to give to charitable causes, he said, the amount that ends up with charity is too little.

Watchdogs advice against phone giving

The professional calling industry has long been criticized by nonprofit watchdogs who say not enough of the money collected goes to charity.

Charity Navigator advises people against donating money over the phone, while the Association of Fundraising Professionals forbids members from entering into contracts where compensation is based on a percentage of contributions.

After looking at NEHOV’s 2017 IRS Form 990, Zachary Weinsteiger, an associate program analyst for Charity Navigator, said it appeared NEHOV was spending about 12% of its revenues on programs, which he termed “critically bad."

“Even for an organization this small, that is a big red flag,” he said.

One of the metrics Charity Navigator uses to rate charities is its fundraising expenses — the percentage of each dollar it spent that went toward fundraising.

Organizations receiving the highest rating from Charity Navigator in fundraising expenses, such as the Veterans of Foreign Wars Foundation, spend less than 10 cents per dollar on fundraising.

In 2017, NEHOV reported spending $149,649 of its total $177,904 in expenses on fundraising, meaning that of every dollar it spent, 84 cents went toward fundraising.

More than dollars

NEHOV President Jim Collins, a Vietnam-era veteran, said he does a lot of things that don’t show up on paper.

Interviewed at his home in Rhode Island, Mr. Collins said he spends many hours picking up donations of furniture and other goods and transporting them to the homes of veterans in need.

He said he uses the money he gets from All-Pro to provide checks for personal expenses that have helped hundreds of veterans.

Asked about the genesis of NEHOV, Mr. Collins said he had always wanted to help fellow veterans, and that Mr. Rondeau said he could help him create a great organization.

Mr. Collins said he has known Mr. Rondeau for years after their sons became friends, and met Mr. Smerlas through that friendship.

He said Mr. Smerlas gives NEHOV perks that don’t show in the percentage, such as a free booth at tailgate parties Mr. Smerlas hosts at Patriots games, and also signs autographs and comes to events he organizes.

Mr. Collins, a supporter of public safety, also noted that All-Pro has been used by many police and fire unions. If they trust him, he reasoned, why shouldn’t he?

“To me, I’d rather give it to someone who is a friend,” Mr. Collins said regarding the contract.

Mr. Brainsky, the All-Pro lawyer, provided a document that he said represented meeting minutes that show that Mr. Rondeau recused himself from selection of All-Pro as the charity’s solicitor.

The document states that Mr. Collins and Mauricia Hardy, Mr. Rondeau’s sister, voted to select All-Pro after Mr. Rondeau “excused himself.” It does not include information about any discussion that led to the decision to select All-Pro or whether any other companies were considered.

Mr. Brainksy said that Mr. Rondeau draws no salary from NEHOV and takes no commission “or other compensation” from All-Pro relative to services provided to NEHOV. He noted that its board members were aware of his position with All-Pro when they decided to contract with the company.

“There is simply no conflict of interest in regard to Mr. Rondeau’s involvement with NEHOV,” Mr. Brainsky wrote in a letter to the T&G.

Observers: Disclosures should have been made

Multiple lawyers and charity watchdogs contacted by the T&G said it appeared Mr. Rondeau has a conflict of interest that should have been publicly disclosed on NEHOV's 2017 IRS 990.

Arthur Rieman, managing attorney for the Law Firm for Nonprofits, a California firm that represents nonprofits, said it appears that Mr. Rondeau should have acknowledged his position with All-Pro on the 990.

Mr. Rieman said he believed the 990 is flawed in multiple ways, including an erroneous assertion on the first page that all NEHOV’s directors were independent.

James C. Donnelly Jr., a lawyer with Mirick O’Connell in Worcester who advises clients on corporate governance, said the optics of the situation appear “very problematic.”

Mr. Donnelly, who is admitted in U.S. Tax Court, said it appears to him that the 990 should have disclosed Mr. Rondeau’s position with All-Pro.

Such disclosures are designed to ensure that decisions made by charities are made only with the organization’s best interests at heart.

Mr. Donnelly said it’s hard to predict whether the IRS would investigate since there is no evidence here of any financial loss to taxpayers.

The issue is more of a consumer protection one, he said — an area that many times federal or state agencies don’t have resources to pursue.

Doug White, former director of Columbia University’s fundraising management program, said the media has become the main way that the public learns of issues relative to public charities.

Accordingly, he said, it’s important for charities to be transparent in the way they conduct business — something he said does not appear to have happened with NEHOV.

“If this is a good thing for his nonprofit, you would think (Mr. Rondeau) would be proud to disclose it,” Holly Ivel, senior director of business development for nonprofit watchdog Candid, said after reviewing the 990.

Mr. Rondeau said NEHOV’s accountant, who filed the document, believes it was filed correctly, but would file an amendment if needed.

He said media accounts of his industry fail to properly recognize that people need to be prompted to give money.

“It boils down to this – if you don’t ask for a donation, you don’t receive it,” he said.

Contact Brad Petrishen at brad.petrishen@telegram.com. Follow him on Twitter @BPetrishenTG.

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